Australia’s Scandinavian moment.

This could be the end of Australia as a right-wing country.

If the Coalition government loses office after a single term, that will be a lesson that will echo for generations. No government since 1929 has lasted just a single term.

The Budget of 2014-15 will go down in history as a masterclass of how to reverse an enormous lead. The government’s win in the 2013 election was enormous. The coalition won 53.5% to 46.5% – the strongest two-party preferred result since Howard beat Keating in 1996. Labor lost a whopping 17 seats.

But in the offices of Joe Hockey and Matthias Corman, this grand electoral advantage was soaked in petrol, and on the first Tuesday in May, they lit the spark.

The Budget was reviled as soon as the government started leaking its details. That sent them to their lowest poll number of 45% – a level to which they have sunk three times.

Newspoll

Some political events pass by, and others stick in the collective imagination and become a living part of our political reality. These events are political touchstones. The events aboard the MV Tampa, (Prime Minister Howard refused entry to Australia to a group of refugees) is a good example of a political touchstone. Howard’s poll standing shot up, saving an election that had looked very shaky.

That has never been forgotten – the existence of a range of harsh policies including detention centres in Nauru and PNG can be traced back to that election.

John Hewson’s explanation of GST on cake is another touchstone, guaranteeing that politicians give simple answers, not complex ones, to complex questions. (In trying to introduce a new tax, Mr Hewson got bogged down in the details on TV, and lost the election.)

The 2014-15 Budget may prove to be another political touchstone. I blogged in June about the metrics that showed this Budget seemed to have captured the public’s attention far more than its predecessors. But the impact of the Budget has proved even more long-lasting than I thought, as the Government struggles to move its policies through the Senate.

When this Budget is remembered, the single biggest lesson will be about charging people to go to the doctor. This is a wildly unpopular policy. The memory of Gough is strong. Australians love Medicare. It doesn’t matter that the Government eventually dumped the policy. In fact it makes their situation worse almost, because they suffer all the reputational damage, gaining none of the budgetary advantages.

Should this Government lose next year’s election, Medicare will be very very safe for the next dozen electoral cycles. It will find champions on both sides of the political aisle. Indeed, politicians may clamber over each other to fund Medicare better.

The second grand lesson of the 2014-15 Budget will be about the deregulation of university. This is an issue I see coming up time and again. Do we want an Americanised higher education sector? The answer appears to be yes if you are a Vice-Chancellor and no if you are everyone else. If this government loses, centralised fee-setting and below market interest rates on HECS would appear to be safe for a long time.

The timing for an Abbott government loss would be apt. In the US, the ebb and flow of wealth concentration has reached what looks like its zenith, and the eagerness for a higher tax, lower inequality future is mounting. Such arguments have spilled over to Australia too.

The future is one where increased marketisation of public services is going to be very difficult to advocate for. The chance of policy proposals involving higher fees and less regulation ever making it out of cabinet meetings is going to be far far lower. All those MPs will know that their necks will be on the line.

The astute political operator might even see links from Australians’ apparent taste for government involvement with health and education to the enthusiasm for the NDIS and paid parental leave, and come up with a rather Scandianavian policy package to present to Australian voters.

Our future may be rather more Swedish than American, if the polls don’t tighten before the next election.

But that election won’t occur until the second half of 2016, leaving plenty of time for events to intercede. All the shortcomings of Mr Shorten may be yet to be fully known, a deus ex machina scenario involving terrorism or refugees could boost Mr Abbott’s standing at a crucial juncture, he could reform his ways after learning a very hard lesson in the first year of his term, or he could be replaced by Mr Turnbull. This last option would somewhat prove my point, because when the right-wing party is led by a centrist, it shifts the whole spectrum left.

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thomasthethinkengine

Thomas the Think Engine is the blog of a trained economist. It comes to you from Melbourne Australia.

2 thoughts on “Australia’s Scandinavian moment.”

  1. Do you think it’s possible that voters still have enough residual dislike of Labor to give the Coalition a second term?

    The 2013 election seemed primarily about voting out the ‘worse’ of the two parties rather than any acceptance of the winners’ policies. I’m not convinced that such voter mentality will change by 2016. Sure, you could point to 2PP polling showing a clear lead to Labor, but there’s the equally important story of increasing, yet volatile, third party votes that suggests people simply want someone in who is ‘different’ from the previous generation of politicians and will choose ANY other candidate to make their point.

    Aside from that comment, I think there is a future for Scandanavian-esque social democracy in Australia. Many segments of the media might be frothing at the mouth over the thought of increased government involvement in people’s lives, but from a historical perspective most Australians are actually quite comfortable with government presence (provided they are getting ‘value for money’). I sincerely hope that the pollies increasingly realise that newspaper and radio editorials are becoming less and less indicative of mainstream Australian views.

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  2. The tactics of the government are truly bizarre. I never thought Tony Abbott would make it through a whole term as leader given his past performance and personality, but he has really exceeded my wildest expectations. Perhaps they really have confused the rejection of the Rudd-Gillard government with a mandate to implement all their fantasy policies they didn’t bring to the election campaign.

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